EXECUTIVE
EMPLOYMENT
AGREEMENT
THIS
AGREEMENT (the "Agreement") entered into
as of the date signed by the parties below by and between Adams
Golf, Inc. and its subsidiaries with its principal place of
business at 2801 East Plano Parkway, Plano, Texas (the "Company")
and Mr. Oliver Brewer (the "Executive");
RECITALS
WHEREAS , the Executive is and has been
employed by the Company for the past six yeas as its Chief
Executive Officer;
WHEREAS , the Company's Board of
Directors desires assurance of the continued association and
services of the Executive in order to retain his experience,
skills, abilities, background, and knowledge, and is therefore
willing to engage his services on the terms and subject to the
conditions set forth below;
WHEREAS , the Executive desires and is
willing to continue employment with the Company on the terms and
subject to the conditions set forth below;
NOW
THEREFORE , in consideration of the
premises and mutual covenants contained herein, the parties agree
as follows:
AGREEMENT
1.
POSITION AND
DUTIES
During the term of this
Agreement, the Company shall employ the Executive as Chief
Executive Officer. The Executive's duties shall be those, which
shall be prescribed by the Board of Directors from time to time
which shall be those reasonably expected of a chief executive
officer of a similarly capitalized corporation and those performed
by his predecessor. The Executive shall use his best efforts to
promote the best interest of the Company. The Executive shall
devote his knowledge, skill and, exclusively (other than as set
forth below), all of his professional time, attention and energies
(reasonable absences for vacations and illness excepted), to the
business of the Company in order to perform such assigned duties
faithfully, competently and diligently. Notwithstanding the
foregoing, it is understood and agreed between the parties that the
Executive may (i) engage in charitable and community activities,
(ii) manage personal investments and affairs and (iii) serve on the
boards of directors of a reasonable number of other corporations or
the boards of a reasonable number of trade associations, so long as
such activities and investments do not interfere or conflict with
the Executive's performance of his responsibilities and obligations
to the Company.
2.
TERM OF
EMPLOYMENT
The Company agrees to employ the
Executive and the Executive agrees to serve the Company pursuant to
the terms and conditions of this Agreement for a term of three (3)
years, commencing on January 1, 2008 and expiring on December 31,
2010, unless earlier terminated pursuant to this Agreement.
Notwithstanding any contrary clause in this Agreement, the
Executive shall serve at the pleasure of the Board of Directors and
may be terminated at any time in accordance with the provisions of
this Agreement. The Executive's termination shall not, in any way,
prejudice the Executive's rights under this Agreement.
3.
PLACE OF
EMPLOYMENT
The place of employment shall be
at the Company's principal office currently located in Plano,
Texas; provided, however, that the Company may from time to time
require the Executive to travel temporarily to other locations on
Company business.
4 .
COMPENSATION
The Executive shall receive, for
all services rendered to the Company as an employee, the following
compensation.
A.
Salary . The Executive shall be paid an annual base
salary for each respective year as stated below. The Executive's
Annual Base Salary shall be payable in equal installments in
accordance with the Company's general salary payment policies, but
no less frequently than monthly.
2008: Four-Hundred Twenty-Five
Thousand ($425,000) dollars;
2009: Four-Hundred Fifty
Thousand ($450,000) dollars;
2010: Four-Hundred Seventy-Five
Thousand ($475,000) dollars;
B.
Incentive Compensation .
i. Each calendar year, the
Executive shall be eligible for two bonuses. The first bonus is to
be paid at the end of the first half of the calendar year but no
later than July 20 and the second bonus is to be paid at the end of
the second half of the year but no later than January 20 of the
following year. Each bonus shall be contingent upon the Company
achieving certain revenue and EBITDA goals for the applicable half
of the calendar year as agreed upon and stated in advance by the
Board of Directors, The amount of each bonus shall be as
follows:
(a)
Thirty Seven and One-Half (37.5%) percent of Executive's annual
base salary if the Company achieves its stated, conservative
revenue and EBITDA goals;
(b)
Fifty (50%) percent of Executive's annual base salary if the
Company achieves its stated, negotiated target (annual board plan)
revenue and EBITDA goals;
(c)
One Hundred (100%) percent of Executive's annual base salary if the
Company achieves revenue and EBITDA goals that are twenty (20%)
percent over its stated, negotiated revenue and EBITDA
goals;
(d)
The Company shall prorate accordingly each of the Executive's
incentive bonuses each calendar year based on the Company's revenue
and EBITDA performance above its stated, conservative revenue and
EBITDA goals and below the performance that would pay the Executive
his maximum bi-annual bonus, as defined in C above.
ii.
When the Executive receives incentive compensation prior to the
Company's financial results being verified by the Company's
independent auditors and the independent auditors determine that
the Company's financial results are other than the Company
determined them to be resulting in a revised situation wherein the
Executive was actually not entitled to receive his potential
incentive compensation, then the Executive agrees to return all
unearned incentive compensation forthwith.
iii.
The Company's Board of Directors set the conservative and
negotiated revenue and EBITDA goals for fiscal 2008 at the November
2007 Board meeting. The Company's Board of Directors will establish
the conservative (75% of annual bonus target) and negotiated target
(annual board plan) (100 % of annual bonus target) goals annually
for fiscal years 2009 and 2010 at the last Board meeting of 2008
and 2009, respectively.
C.
Equity Participation .
i.
Each calendar year of this Agreement, the Executive shall be
granted Two-Hundred Thousand (200,000) shares of the Company's
restricted shares of common stock, One-Hundred Thousand (100,000)
shares on the last trading day of June and One-Hundred Thousand
(100,000) shares on the last trading day of December. The Executive
shall be solely responsible for all taxes associated with these
grants.
ii.
At any time during the term of this Agreement, if a majority of the
capital stock of the Company is to be sold or transferred to an
entity not associated or owned by the Company or its affiliates or
substantially all of the assets of the Company are to be sold or
transferred to an entity not associated or owned by the Company or
its affiliates, all of the Executive's potential equity grants
shall accelerate and take place no later than the calendar day
immediately preceding the sale or closing date of the sale or
transfer transaction.
D.
Long Term Incentive
Payment . The Executive shall be eligible for a one
time, long term incentive payment at the conclusion of this three
(3) year Agreement contingent upon the Company achieving certain
cumulative EBITDA goals during the contract period as stated below.
The long-term incentive payment, if any, shall be made as soon as
administratively feasible but not later than February 15,
2011.
i.
If the Company achieves a cumulative EBITDA of Seven-Million
Five-Hundred Thousand ($7,500,000) dollars the Executive shall be
granted an incentive payment of Seven-Hundred Fifty Thousand
($750,000) dollars.
ii.
If the Company achieves a cumulative EBITDA greater than
Seven-Million Five-Hundred Thousand ($7,500,000) dollars but less
than Twelve Million ($12,000,000) dollars the Executive shall be
granted an incentive payment that is prorated accordingly between
the two goals.
iii.
If the Company achieves a cumulative EBITDA of Twelve Million
($12,000,000) dollars the Executive shall be granted an incentive
payment of One-Million Five- Hundred Thousand ($1,500,000)
dollars.
iv.
Additionally, if the Company achieves a cumulative EBITDA that is
greater than Twelve Million ($12,000,000) dollars, the Executive
shall receive five (5%) percent of all cumulative EBITDA greater
than Twelve Million ($12,000,000) dollars.
E.
Employee Benefit
Plans . The Executive and his "dependents," as that term
may be defined under the applicable employee benefit plan(s) of the
Company, shall be included in all plans, programs and policies
which provide benefits for Company employees and their dependents
on a basis commensurate with the Executive's position and
authorities, duties, powers and responsibilities.
F.
Expenses . The Executive is authorized to incur and
shall be reimbursed by the Company for any and all reasonable and
necessary business related expenses including, but not limited to,
a company car, a local country club membership expenses for auto,
business travel, entertainment, gifts and similar matters. The
company car and local country club membership are subject to the
compensation committee's approval, which shall not be unreasonably
withheld.
5.
ABSENCES
The Executive shall be entitled
to vacations in accordance with the Company's vacation policy in
effect from time to time and to absences because of illness or
other incapacity and shall also be entitled to such other absences
as are granted to the Company's other senior executive officers or
as are approved by the Board of Directors, which approval shall not
be unreasonably withheld.
6.
TERMINATION
The Executive's employment with
the Company may be terminated only as follows:
-
- By the Company Without
Cause. The Company may at any time
terminate the Executive's employment without Cause upon sixty-(60)
days prior written notice to the Executive.
- By the Executive Without Good
Reason . The Executive may at any time
terminate his employment for any reason upon thirty-(30) days
written notice to the Company.
- By the Company For
Cause . The Company may terminate the
Executive's employment for Cause. In such event, the Company shall
give the Executive prompt written notice (in addition to any notice
that may be required below) specifying in reasonable detail the
basis for such termination. For purposes of this Agreement, "Cause"
shall mean any of the following conduct by the
Executive:
i.
The deliberate and
intentional breach of any material provision of this Agreement,
which breach the Executive shall have failed to cure within thirty
(30) days after the Executive's receipt of written notice from the
Company specifying the specific nature of the Executive's breach;
or
ii.
The deliberate and
intentional engaging by the Executive in gross misconduct that is
materially and demonstrably harmful to the best interests, monetary
or otherwise, of the Company; or
iii.
Conviction of a
felony or conviction of any crime involving moral turpitude, fraud
or deceit.
-
- By the Executive for Good
Reason. The Executive may terminate his
employment for Good Reason upon providing thirty (30) days written
notice to the Company no later than 90 days after the Executive
reasonably becomes aware of the circumstances giving rise to such
Good Reason. For purposes of this Agreement, "Good Reason" means
any of the following conduct of the Company, unless the Executive
shall have consented thereto in writing:
i.
Material breach of any material provision of this Agreement by the
Company, which breach shall not have been cured by the Company
within thirty (30) days after Company's receipt from the Executive
or his agent of written notice specifying in reasonable detail the
nature of the Company's breach; or
ii.
The assignment to the Executive of any duties inconsistent in any
material respect with the Executive's position including, but not
limited to any diminution of the Executive's status and reporting
requirements) authority, duties, powers or responsibilities,
excluding for this purpose any action respecting the Executive that
is remedied by the Company within thirty (30) days after receipt of
written notice from the Executive to the Company; or
i.
The failure of the
Company to obtain the assumption in writing of its obligations to
perform this Agreement by any successor prior to a merger,
consolidation or sale as contemplated in Section 10; or
ii.
A reduction in the
Executive's total compensation, excluding for this purpose any
reduction that is remedied by the Company within thirty (30) days
after receipt of written notice from the Executive to the Company.
For purposes of this subsection, a reduction in the overall level
of compensation of the Executive resulting from the failure to
achieve corporate, business unit and/or individual performance
goals established for purposes of incentive compensation for any
year or other period shall not constitute a reduction in the
overall level of compensation of the Executive.
iii.
The relocation of
the Executive's place of employment to a site more than 75 miles
from Plano, Texas.
iv.
If the Company fails
to set internal financial goals or adopt a stock option
plan
-
- Disability
.
In the event that
the Executive shall be unable to perform his duties hereunder on a
full time basis for a period of sixty (60) consecutive calendar
days by reason of incapacity due to illness, accident, physical or
mental disability or otherwise, then the Company may, at its
discretion, terminate the Executive's employment if the Executive,
within ten (10) days after receipt of written notice of termination
is given (which may occur before or after the end of the entire 60
day period), shall not have returned to the performance of all of
his duties on a full-time basis.
- Death
.
The Executive's
employment shall terminate upon his death.
- Mutual Written
Agreement . This Agreement and the
Executive's employment with the Company may be terminated at any
time by the mutual written agreement of the Executive and the
Company.
- COMPENSATION IN THE EVENT OF
TERMINATION
In the event that the
Executive's employment terminates prior to the expiration of this
Agreement, the Company shall pay the Executive compensation and
provide the Executive and his eligible dependents with benefits as
follows:
A.
Termination By Company Without Cause or Termination By
Executive For Good Reason . In the event that the
Executive's employment is terminated by (i) the Company without
Cause or (ii) the Executive for Good Reason, then the Company shall
continue to pay or provide, as applicable and in accordance with
the Company's normal payroll practices unless otherwise specified,
the below stated compensation and benefits to the Executive. The
Executive's subsequent death or disability shall in no way
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